Alberto Lopes, a LLM student from the Rio de Janeiro State University (UERJ) was invited by the Environment, Energy and Natural Resources Center (EENR Center) to carry out research on the practice of Joint Operating Agreements in the United States, at the Law Center this summer 2013.

Alberto’s visit is part of an active academic exchange between the Law Center and the UERJ Law School that includes participation in conferences and research on energy law and international investment law.
Alberto took time to answer some questions about his research and his experience visiting Houston.

Why did you decide to come to the Law Center of the University of Houston for your research?

The University of Houston Law Center has a worldwide reputation for excellence. Placed in the energy capital of the world, the UHLC offers a program in Energy, Environment & Natural Resources Law which attracted my attention for a long time. In May, when Professor Julian Cardenas from the Law Center came to UERJ to participate in programs in Rio (*), I became convinced that I should visit the UHLC. Doing research about JOAs, an important agreement for the oil industry used around the world, would be furthered by a better understanding of Oil & Gas Law in the United States where the JOA was created. The UHLC was the clear best choice.

What was the main focus of your research?

In Brazil. to jointly undertake exploration and production activities the parties must enter into a Consortium Agreement that is a non-corporate joint venture. The JOA model forms state that the relationship among the parties is not a joint venture, and I wanted a better understanding of the reasons why American model contracts avoid the joint venture relationship.

Also, Brazilian Petroleum Law declares the joint and several liabilities of the parties in a Consortium for exploration and production of Oil & Gas under a Concession Agreement. It was important to me to verify the trends dealing with this liability question though the model form agreements and to verify the extent that an operator should be liable for losses and liabilities—including third-party claims, environmental liabilities and clean-up costs—arising from joint operations. The study of the exculpatory clauses, mainly the interpretation of the AAPL model forms by the Texas Courts was important to my research, such as the decision of the Supreme Court of Texas in the case Reeder v. Wood County Energy, LLC.

The consequences of a default, specifically a failure by one party to satisfy a cash call was also a question that took my attention. Forcing the defaulting party to forfeit its entire participating interest is an unenforceable remedy. The introduction of a new remedy, the so-called “withering option,” in the AIPN model JOA form is a more proportionate remedy than complete forfeiture.

How was your stay in Houston?

I spent two weeks in the UHLC and was a terrific experience. The campus is great and the Law Center is very well structured. I was very welcomed by Ms. Peggy Fortner who directs the Masters of Law program at the Law Center. The O'Quinn Law Library Team was fantastic and taught me how to use the database sources and the many secondary sources. I also had the opportunity to meet Prof. Jacqueline Weaver, A.A. White Professor of Law, who had guest-lectured at UERJ several years earlier and who shares many mutual interests.